Real Estate Trends- #MillennialFactor


By Shobit Gupta, Vice President of Investments and Acquisitions

This report highlights the changing online Food Service industry and the impact on small retail properties in Michigan under 15,000 SF constructed post 2008-09 global financial crisis. For this report we tracked the major Metropolitan Statistical Areas (MSA's) of #Detroit, #AnnArbor, #Grand Rapids, and #Lansing.


Michigan has a population of 9.9 million people with a median age of 39.7 and a median household income of $52,492. Between 2015 and 2016 the median household income grew from $51,084 to $52,492, a 2.76% increase. 

The largest universities in Michigan are University of Michigan-Ann Arbor, with 14,186 graduates, Michigan State University, with 11,920 graduates, and Central Michigan University, with 6,665 graduates.


Market Snapshot - Retail <15,000 SF Developed after 2008-09

Detroit, Ann Arbor, Grand Rapids and Lansing


1.   Supply – The small retail segment added over three million SF to existing supply in the last five years, with an average annual growth rate of 27% over the past ten years. Approx. 584,913 SF of new supply was reported at the end of Q4 2018. 

2.   Vacancy - A 6.0% vacancy rate was recorded in 2018 compared to 5.6% in 2017. The five-year average vacancy rate was recorded at 6.1%.

3.   Absorption - For the sixth consecutive year, the small retail market segment experienced positive net absorption. The market closed 2018 with overall absorption of 161,276 SF in 2018, up from 144,536 SF in 2017. The four major MSA’s of #Detroit, #Ann Arbor, #Lansing, and #GrandRapids collectively absorbed 749,286 SF of small retail space.

4.   Asking Rents – Asking rents are at a historic high of $25-35 PSF NNN while average actual rents remain in the $25 PSF NNN range making this the best performing segment among all other real estate types in the Michigan market. As much as E-commerce negatively affected many big-box retailers, the thriving food service industry and E-Food delivery apps have had a positive impact on smaller retail. 

Retail and The Food Service Industry

  • How many meals does an American millennial cook at home every day? A recent study shows that the average millennial American only cooks about five meals per week.In 2018, revenue in the online Food Delivery segment surpassed the $1.8 billion mark, thanks to apps like UberEats, DoorDash, PostMates, and GrubHub.

  • Revenue is expected to show an annual growth rate (CAGR 2019-2023) of 7.3%, resulting in a market volume of $2.4 billion by 2023, which will have a direct impact on the small retail market.

"The global retail and leisure landscape is undergoing fundamental change–lasting and structural, driven by macro demographic trends, technological advancements and ever evolving consumer expectations. The combination of these trends and expectations is having a huge impact on both the retail and food service sectors globally." ~ ICSC - F&B Study 

Restaurant and Food Service jobs in Michigan = 10% of employment in the state


In 2018, the restaurant and food service industry accounted for 440,600 jobs in 17,198 eating and drinking locations in the State of Michigan.

Though the 2018 Q4 numbers may point to a bit of a lull, consumer confidence is at an 18-year record high, population growth is on the rise and new construction and redevelopment continue to make gains in Michigan.

Stores and restaurants responding to consumer demand are expected to be met with optimism as consumer spending is up. With all the hype surrounding the cities, the new developments on the rise, and our taste-diversified culture, entertainment, and good eats, we expect the retail scene in Michigan to continue to make gains in the foreseeable future. 

Data Sources : , BLS,, Costar, Statista,, Data.usa